Fact is More Entertaining Than Fiction; Russians Play the Bad Guys…Again

Matt Damon isn’t in this short film, but it would be great casting. Hermitage Capital Management, once the largest foreign investor in the Russian stock market, made this video in Russian and in English and posted it on Youtube.com. They accuse police officials, bankers, judges and lawyers of working with gangsters to steal $230 million from the company and using its documents to obtain another $230 million from the Russian treasury through fraudulent tax refunds. The Washington Post reports that the accusations include “several bureaucrats in two Moscow tax agencies of involvement in the crimes and lists more than 30 suspicious tax refunds issued by the agencies between 2006 and 2008, as well as the account numbers of the recipients.”

The Post reports that criminals seized control of Hermitage’s Russian assets after its U.S.-born chief executive, William F. Browder, was expelled from the country in 2005. The Interior Ministry said it acted against Hermitage because of financial crimes and wants to charge Browder with tax violations.

Browder, who I think should be played by George Clooney if a full length film is made, has posted the video you see above. It accuses authorities of involvement in the theft and fraud. He says officials raided the Russian offices of Hermitage and those of its Moscow lawyers on a pretext and seized all of the company’s official documents, seals and accounting records. The items were then used by convicted criminals and others to gain control over the company’s assets and later pull off the tax fraud, Browder said.

The FCPA Blog reports about a story posted by Hermitage described Browder as an activist fund manager who conducted a campaign that “exposed widespread theft and corruption at Gazprom,” Russia’s biggest company that was formed from the former Ministry of Gas Industry of the Soviet Union. Browder was unable to renew his visa despite help from Jack Straw, the former British Foreign Secretary, and the European Commission. The report also said:

Mr. Browder met Dmitry Medvedev . . . at the World Economic Forum in Davos in January 2007 and requested his assistance in renewing his visa. A month later, Hermitage received a call from Lieutenant Colonel Kuznetsov [from the Russian Interior Ministry], indicating that he was aware of Mr. Browder’s visa difficulty. According to Hermitage, the Interior Ministry officer sought a meeting at Hermitage offices. He said: “My answer will depend upon how you behave, what you provide … the sooner we meet and you provide what is necessary, the sooner your problems will disappear.”

According to its website, Hermitage Capital Management was founded in 1996 by William Browder and the late private-banker extraordinaire, Edmond Safra. Hermitage, headquartered in London, says its clients include “international financial institutions, corporations, pension funds, public endowments, investment advisors, family offices and high net-worth individuals.”

If the allegations are true, it is one of the most intricate and well-executed cases of government fraud and corruption in history. I would love to write the screenplay if I had more than the 10 minutes it took me to blog about it.